Mui writes: "The White House proposal to overhaul the U.S. food stamp program - and the deep cuts it would make to benefits for the poorest households - has sparked public outrage on both sides of the aisle. But there's another change tucked into the proposal that businesses say caught them off guard - and could wind up costing them more than $2 billion."

Donald Trump. (photo: Spencer Platt/Getty Images)

Trump Wants to Start Charging Stores to Accept Food Stamps

By Ylan Mui, CNBC

09 June 17

he White House proposal to overhaul the U.S. food stamp program — and the deep cuts it would make to benefits for the poorest households — has sparked public outrage on both sides of the aisle. But there's another change tucked into the proposal that businesses say caught them off guard — and could wind up costing them more than $2 billion.

That provision is a new fee that the White House wants to charge retailers that accept food stamps, which is now known as the Supplemental Nutrition Assistance Program.

The Office of Management and Budget said the fee would be assessed when stores sign up and would require renewal after five years. The budget office said the amount would depend on the size and type of retailer, but the president's budget estimates that the fee would generate $2.4 billion in revenue over the next decade.

An OMB official described the fee as "modest" and "reasonable," emphasizing that some large retailers redeem a billion dollars or more in food stamp benefits each year.

"Although a small number of stores may choose to leave the program rather than pay the fee, we do not expect that this will affect access to authorized stores," the official said.

The proposal surprised the grocery industry, which is already fighting to block the controversial border adjustment tax on Capitol Hill. That measure would lower the cost of exports but raise the price of imports and has been widely opposed by chain retailers. Trump's food stamp fee, however, would fall squarely on supermarkets.

Grocers oppose the "flawed policy of imposing fees on food retailers in order to reduce the cost of the federal government's nutrition assistance benefits to the most needy in our society," said Leslie G. Sarasin, president of the Food Marketing Institute, which represents the industry.

Changes hit congressional opposition

Beyond the new fee, the Trump administration is proposing $191 billion in cuts over the next decade to the food stamp program. The U.S. budget office said the reductions would come from tightening the work requirement to qualify for the benefits, but said the details would be left up to individual states. The administration also expects states to make up some of the lost funding.

The existing system "is a formula for waste and growth rates and costs that are simply unsustainable," budget director Mick Mulvaney said during testimony on Capitol Hill last month. "The total spending should not go down. Or if it does, it goes down because of efficiencies and not because of reductions."

But the proposed changes are already running into obstacles on Capitol Hill — even among Republicans. Rep. Michael Conaway of Texas and Sen. Pat Roberts of Kansas, the chairmen of the House and Senate agriculture committees, have signaled they would fight the measure.

"We need to take a look at our nutrition assistance programs to ensure that they are helping the most vulnerable in our society," they said in a statement.

Food stamps accounted for about 5.8 percent of the estimated $669 billion in annual sales at grocery stores, according to the Food Marketing Institute. But for some retailers, it accounts for a much larger share of revenue. Wal-Mart is the largest supermarket in the country, and retail analyst Craig Johnson of Customer Growth Partners estimates it rings up $16 billion in food stamp sales each year. That accounts for about 23 percent of federal spending on food stamps.

Wal-Mart declined to comment. But after the government restricted food stamp benefits in 2013, the company reported a 0.9 percent hit to its quarterly grocery sales.

"They may be calling it out as an excuse for underperformance," Johnson said. "But it will be a small marginal impact."

Walmart is a massive retailer that can weather those small hits, but grocers overall operate on notoriously thin margins. Smaller stores — particularly the bodegas and independent retailers that serve poor neighborhoods — would likely feel more pain.

"Certainly, they would see it in their bottom line," said Brian Lang of The Food Trust, a Pennsylvania nonprofit. Lang directs a campaign to make healthy food more accessible. "Implementing cuts to that extent are going to have stark consequences for retailers, especially in low-income communities."

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Furkin' hypocritical ignoramus.How would HE and his cabal of vicious, wealthy swinehund know ANYTHING about food stamps and how hard it ALREADY is to get them.If you make $12,000 annually ($5.80 per hour), you only qualify for $18.00/ month in food stamps.These griping-evil prats should be made to try living on that some time; they'd be chewing on their highly polished Gucchis in a few hours!

Furkin' hypocritical ignoramus.How would HE and his cabal of vicious, wealthy swinehund know ANYTHING about food stamps and how hard it ALREADY is to get them.If you make $12,000 annually ($5.80 per hour), you only qualify for $18.00/ month in food stamps.These griping-evil prats should be made to try living on that some time; they'd be chewing on their highly polished Gucchis in a few hours!

For sure he does not know or does not care that state's are already paying someone to manage their food stamp program. Since 2007, Florida has been contracted to pay JP Morgan $90,351,202.22. 18 of the 24 states JP Morgan handles have been contracted to pay the bank up to $560,492,596.02 since 2004. http://www.thedailybeast.com/jp-morgans-food-stamp-empire

I would rather see him in this lifetime to be reduced to total bankruptcy, lose all his properties & have to stand in line at a 'soup' kitchen in order to eat. That could probably happen if Russia called in all his & his family's debt's!

This is Trump team's brilliance at its finest: make grocery stores complicit in cutting back or denying food stamps to needy people. Yet while this team is doing everything it can to starve the poor and deny them medical coverage, it is encouraging more population by denying abortion. Just what we need - more unwanted children who will grow up in difficult situations so they can either be used by government as pawns in war, or neglected to death by budgetary termination. This is Trumpian "sense."

Among it's other transgressions, the Trump administration seems set on selling off as much of our government property as possible, privatizing many government services (if you consider prisons as a service) and nickel & diming everyone everywhere.

This all seems to be an attempt to make their budget look more reasonable. They need to come up with big tax cuts for their 1% masters, but at the same time, they need to disguise the inevitable deficits.

Selling the seed corn will make things look good in the short term, which is the only kind of planning the Trumpkins understand. If it LOOKS good right now, it IS good!

I don't know what information they got from whom, but every "hater" I know talked about the SNAP program and how it was eating up taxpayer money for "cheaters." "Military expenditures" were said to pale in comparison.

And now, after an apparent major campaign, this comes. If they can't get away with cancelling Food Stamps, they'll undo by charging grocers for accepting them (in contrast to paying grocers for the extra work.

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